Orica Limited (ASX:ORI) shares gain as global commodity markets improve

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Orica Limited (ASX:ORI) shares gain as global commodity markets improve

Orica Limited (ASX:ORI)
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Highlights

  • Commercial explosives company Orica Limited’s shares closed 5% higher on ASX today (14 March 2022).
  • Orica Limited shares were in green while the materials index (XMJ) closed in red alongside ASX200.
  • Improved global commodity markets seem to be working well for Orica Limited.

ASX-listed commercial explosives company, Orica Limited’s (ASX:ORI) share price closed more than 5% higher on last week’s price. The Victoria-based materials company’s shares remained among the top five gainers of Monday’s trade, picking up from its one-month low on the ASX.

Orica Limited gains while materials sector remains low on ASX

Orica Limited’s shares are a part of the broader materials sector on the ASX. While the week didn’t begin well for the materials sector, which closed lower by 0.67% today, Orica shares soared against the industrial trend. The company’s share price has gained much more in comparison to the related broader ASX indices.

Comparative Analysis of ORI and related indices

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Orica Limited does not have many peers listed on the ASX having a similar business, except for a few other chemical businesses. Therefore, a comparison has been drawn with the sectoral ASX200 Materials Index (XMJ) and the popular Australian equities index ASX200. As reported by Orica Limited in its recently released first half performance update, its business is to benefit from the improved global commodity markets.

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Know more about Orica Limited’s explosives business

Orica Limited claims to be one of the globe’s largest commercial explosives and mine blasting solutions provider. Its business spans from production and supply of explosives, blasting systems and mining chemicals to digital industrial solutions.

As per Orica’s recent half-yearly performance update, it expects the first half performance in 2022 financial year to be stronger in on prior corresponding period (pcp). According to Orica Limited the positive business momentum will be coming in from the improved global commodity markets, resulting into volume growth. Orica also believes the pricing discipline in contract negotiations will broadly mitigate its rising input costs and pass-through lags.

Orica has completed sale of its Minova business to the Aurelius Group on 28 February 2022, bagging in AU$149 million in cash. Minova according to the management was a non-core operation for Orica Limited. In addition to this, Orica’s continuous manufacturing plants have been operating according to the determined market demand.

Road ahead for Orica Limited

Orica claims to be on track to deliver results in line with its previously provided guidance. Securing supply for Orica’s customers is its top priority amid a tightening global market impacted by geopolitical issues and supply chain disruptions.

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